DDA welcomes Blue Cross expansion
BY DAVE BELLOWS
HERALD DEMOCRAT

Rumors that Blue Cross Blue Shield would close its Bonham office are true, but company officials said none of the Bonham employees would be forced out of a job. They'll just have to drive a little further to work.

Blue Cross Blue Shield and TrailBlazer Health Enterprises (a wholly-owned subsidiary of Blue Cross) announced Friday that the Trailblazer office in Bonham will consolidate with Trailblazer's Denison office to form the "Texoma Operations Center."

Elizabeth Nkuo, with Blue Cross' corporate office, said all 200 or so Bonham employees will be allowed to work in Denison. The company plans to move all employees and close the Bonham office by the end of September. For employees who live around Bonham, the move will create a commute of about 30 miles.

Blue Cross has been processing Medicare claims and doing Medicare customer service work in both Denison and Bonham since the mid-1970s. TrailBlazer has more than 250 employees already in Denison.

TrailBlazer will have some help with the move. The Denison Development Alliance, the city's economic development sales tax board, agreed Friday to offer the company $600,000 to consolidate its operations in Denison.

"A city the size of Bonham can't match that. Obviously Bonham is the loser in this," said Roy Floyd, executive director of the Bonham Industrial Foundation. "But we're glad they're keeping the jobs in the area. It'sOK for them to go to Denison and bring those paychecks back to Fannin County -- we would much rather them do that than lose their jobs."

DDA has a policy against stealing industry away from neighboring communities, and the economic developers had explanations as to how moving jobs from Bonham to Denison jibes with that policy. DDA Board Chairman Wayne Cabaniss said the Bonham jobs could have ended up in several locations, which might have meant layoffs or people having to move. "This is not about taking jobs from neighboring community, it's about keeping jobs in our area," he said.

Tony Kaai, DDA president, said he learned that the company intended to leave Bonham one way or another, so the deal helped "save 200 jobs in the Sherman-Denison-Bonham area." In fact, Kaai said, DDA had reason to believe TrailBlazer was considering consolidating its Denison and Bonham locations somewhere else, putting one of Denison's top employers at risk. "The whole shooting match could have gone to Dallas. That made the deal for Denison as much about saving 250 of the best jobs in town as it was about bringing in 200," Kaai said. "These are quality jobs with excellent benefits."

Marti Mahaffey, TrailBlazer's chief operating officer, said the company spent 18 months considering what to do when its lease on the Bonham building, owned by BIF, expired in February. According to company executives, TrailBlazer was at capacity in Bonham and needed more space, but upgrading the Bonham building would have required more changes than would be practical and cost-effective. Medicare billing has been done out of the building on Bonham's North Center Street for 28 years.

"Throughout the past year, we attempted to find an acceptable facility for the Bonham operation, but found no viable operation in the immediate Bonham area. Among the alternatives considered, the best solution is to relocate the Bonham operation to our reconfigured and updated TrailBlazer facility in Denison," said Marti Mahaffey, TrailBlazer's chief operating officer. "The most important consideration was maintaining the jobs."

Mahaffey said other options included locations in Melissa, Anna, Sherman, McKinney, Allen and Dallas.

The Herald Democrat quoted Blue Cross officials Jan. 6 as saying that they were still trying to decide what to do when the lease ran out. Rumors were circulating throughout Bonham at the time that TrailBlazer, one of Bonham's biggest employers, was pulling out for sure.

At that time, Floyd said BIF was still trying to negotiate to keep TrailBlazer in Bonham. Floyd said BIF, a private, non-profit organization, offered the company a new building. He said TrailBlazer wanted a 40,000 square-foot building with 300 parking places. He said BIF could borrow the money to build the building, but wasn't sure TrailBlazer would be willing to pay the rent it would require to repay the loan.

A seven-month lease extension negotiated with BIF will allow TrailBlazer to stay in the building through September.

Floyd said Friday, "We'll go to work today to try to find a business to fill that 30,000 square-foot building, we will make lemonade out of this lemon. We'll fill that building and create even more jobs for the region."

The 72,000-square-foot Denison building has been remodeled and upgraded recently, but will need more remodeling in the next few months to accommodate the additional workforce.

The company lists necessary improvements as converting files storage to office space and installing condensed filing systems, constructing a much larger break room with a glass atrium style outer wall on the north side of the building, and converting the current break room into additional office space, upgrading all the Denison office space with panels and furniture to match the recently upgraded part of the office, adding another small break area on the south side of the building and expanding restrooms.

Mahaffey said TrailBlazer looked into allowing some employees to telecommute, but high-speed Internet service is not available in the area at speeds needed to do TrailBlazer's work.

The DDA incentive amounts to $3,000 per job moved from Bonham and is also the exact amount the company promises to spend on remodeling the Denison office.

DDA agreed to pay $300,000 when TrailBlazer invests at least $600,000 into the Denison office, then another $300,000 when the company proves it has at least 450 full-time employees in Denison, on or before Sept. 30. Under terms of the agreement, TrailBlazer must keep at least 450 employees for two years.

Along with provisions that TrailBlazer must pay its taxes, provide proof it has met its requirements and allow DDA access to employment records -- all boilerplate stuff when it comes to economic development incentive contracts -- the company will be required to refund a prorated amount, plus interest, to DDA if it were to breach the contract.

For example, if the company got the full $600,000 by the first of August, then laid off 50 employees on Feb. 1, 2005, it would have to pay back $37,500.

In press releases and conferences about the consolidation, TrailBlazer and Blue Cross emphasized the quality of the workforce in the Texoma area as a big reason for staying in the region. Gil Glover, TrailBlazer's program management operations, said, "We are very pleased this facility solution allows us to continue utilizing the excellent Texoma area workforce."

A letter from Glover to Bonham and Denison employees said, "All of TrailBlazer's senior management recognizes that this is a very significant change, especially for current Bonham facility employees. While Dallas Medicare operations have relocated five times since 1966 and Denison operations have moved four times since 1974, the Bonham facility has never been relocated at all. We sincerely hope all our Bonham employees will make the move."

Mahaffey promised that Medicare beneficiaries and the medical providers that treat them will not see a disruption in service as a result of the consolidation. "We believe consolidating our Bonham and Denison workforce combined with their high experience levels, knowledge and productivity, will lead to even greater efficiencies and higher quality service," she said.

TrailBlazer was named "Large Employer of the Year" for 2002 by the Denison Chamber of Commerce. The employees of TrailBlazer are known for their generosity in charity drives of all sorts. Through a recent "I gave at the office" campaign, TrailBlazer employees collected donations for the Grayson County Shelter, Reba's Ranch House, Salvation Army Angel Tree, Bryan County Home Hospice and the Buckner Children's Home.

TrailBlazer is also quite active in the March of Dimes and United Way campaigns. From October 2001 through October 2002, the Denison's TrailBlazer office raised $4,795 for March of Dimes and another $1,500 was added to that as a sponsorship from the corporate office in Dallas. TrailBlazer's Bonham and Denison office together ranked 8th in the Red River Division for the March of Dimes campaign in 2002.

That same year, TrailBlazer donated more than $52,000 to the United Way, companywide. The Denison office also gave $1,500 to the Salvation Army locally and $1,000 to the Denison Helping Hands food bank.

Combining the Bonham and Denison operations will create TrailBlazer's second-largest job site. In addition to the Denison center, TrailBlazer will continue to operate at offices in Dallas, Lubbock, San Antonio, and Albuquerque, N.M.; Timonium, Md.; and Richmond, Va.